non-alcoholic beverages sustainability accounting …€¦ · · 2016-10-14non-alcoholic...

SUSTAINABILITY ACCOUNTING STANDARD

CONSUMPTION I SECTOR

© 2015 SASB™

Sustainable Industry Classification System™ (SICS™) #CN0201

Prepared by the

Sustainability Accounting Standards Board®

January 2015

Exposure Draft Standard for Public Comment

www.sasb.org

NON-ALCOHOLIC BEVERAGESSustainability Accounting Standard

T M

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© 2015 SASB™ SUSTAINABILITY ACCOUNTING STANDARD | NON-ALCOHOLIC BEVERAGES

SUSTAINABILITY ACCOUNTING STANDARDS BOARD

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NON-ALCOHOLIC BEVERAGESSustainability Accounting Standard

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About SASB

The Sustainability Accounting Standards Board (SASB) provides sustainability accounting standards for use by

publicly listed corporations in the U.S. in disclosing material sustainability information for the benefit of investors

and the public. SASB standards are designed for disclosure in mandatory filings to the Securities and Exchange

Commission (SEC), such as the Form 10-K and 20-F. SASB is an independent 501(c)3 non-profit organization.

Through 2016, SASB is developing standards for more than 80 industries in 10 sectors.

About this Standard

This Standard is an exposure draft presented for public review and comment. This version is not intended for

implementation.

The public comment period lasts for 90 days, beginning on Wednesday, January 14th, 2015, and ending on

Tuesday, April 14th, 2015. The Standard is subject to change thereafter.

For instructions on providing comments to SASB, please click here.

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https://comment.sasb.org/

SUSTAINABILITY ACCOUNTING STANDARD | NON-ALCOHOLIC BEVERAGES

Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Purpose & Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Industry Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Guidance for Disclosure of Material Sustainability Topics in SEC filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Guidance on Accounting of Material Sustainability Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Users of the SASB Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Scope of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Reporting Format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Material Sustainability Topics & Accounting Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Energy Management & Fleet Fuel Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Water Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Health & Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Product Labeling & Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Packaging Lifecycle Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Environmental & Social Impacts of Ingredient Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

© 2015 SASB™

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INTRODUCTION

Purpose & Structure

This document contains the SASB Sustainability Accounting Standard (SASB Standard) for the Non-Alcoholic Beverages

industry.

SASB Standards are comprised of (1) disclosure guidance and (2) accounting standards for sustainability topics

for use by U.S. and foreign public companies in their annual filings (Form 10-K or 20-F) with the U.S. Securities and

Exchange Commission (SEC). To the extent relevant, SASB Standards may also be applicable to other periodic

mandatory filings with the SEC, such as Forms 10-Q, S-1, and 8-K.

SASB’s disclosure guidance identifies sustainability topics at an industry level, which may be material— depending on a

company’s specific operating context—to a company within that industry.

Each company is ultimately responsible for determining which information is material and is therefore required to be

included in its Form 10-K or 20-F and other periodic SEC filings.

SASB’s accounting standards provide companies with standardized accounting metrics to account for performance on

industry-level sustainability topics. When making disclosure on sustainability topics, companies adopting SASB’s

accounting standards will help to ensure that disclosure is standardized and therefore useful, relevant, comparable,

and auditable.

Industry Description

The Non-Alcoholic Beverages industry produces a broad range of beverage products, including various carbonated

soft drinks, syrup concentrates, juices, energy and sport drinks, teas, coffee, and water products. Industry participants

partake in syrup manufacturing, marketing, bottling operations, and distribution, with larger companies typically

being more vertically integrated into finished-product operations that bottle, sell, and distribute the finished products.

The industry currently faces challenges with addressing the health and nutritional benefits of its products. Additionally,

the purchase of raw ingredients such as water and sugar is among the industry’s largest expenses and creates supply

challenges in areas considered to be water-stressed and/or exposed to shifting weather patterns associated with

climate change.

© 2015 SASB™ SUSTAINABILITY ACCOUNTING STANDARD | NON-ALCOHOLIC BEVERAGES 1

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Guidance for Disclosure of Material Sustainability Topics in SEC Filings 1. Industry-level Sustainability Topics

For the Non-Alcoholic Beverages industry, SASB has identified the following sustainability topics:

• Energy Management & Fleet Fuel Consumption

• Water Management

• Health & Nutrition

• Product Labeling & Marketing

• Packaging Lifecycle Management

• Environmental & Social Impacts of Ingredient Supply Chains

2. Company-level Determination and Disclosure of Material Sustainability Topics

Sustainability disclosures are governed by the same laws and regulations that govern disclosures by securities issuers

generally. According to the U.S. Supreme Court, a fact is material if, in the event such fact is omitted from a particular

disclosure, there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the

reasonable investor as having significantly altered the ‘total mix’ of the information made available.”1, 2

SASB has attempted to identify those sustainability topics that it believes may be material for all companies within each

SICS industry. SASB recognizes, however, that each company is ultimately responsible for determining what is material

to it.

Regulation S-K, which sets forth certain disclosure requirements associated with Form 10-K and other SEC filings,

requires, among other things, that companies describe in the Management’s Discussion and Analysis of Financial

Condition and Results of Operations (MD&A) section of Form 10-K “any known trends or uncertainties that have had

or that the registrant reasonably expects will have a material favorable or unfavorable impact on net sales or revenues

or income from continuing operations. If the registrant knows of events that will cause a material change in the

relationship between costs and revenues (such as known future increases in costs of labor or materials or price

increases or inventory adjustments), the change in the relationship shall be disclosed.”2

Furthermore, Instructions to Item 303 state that the MD&A “shall focus specifically on material events and

uncertainties known to management that would cause reported financial information not to be necessarily indicative

of future operating results or of future financial condition.”2

In determining whether a trend or uncertainty should be disclosed, the SEC has stated that management should use a

two-part assessment based on probability and magnitude:

• First, a company is not required to make disclosure about a known trend or uncertainty if its management

determines that such trend or uncertainty is not reasonably likely to occur.

1 TSC Industries v. Northway, Inc., 426 U.S. 438 (1976). 2 C.F.R. 229.303(Item 303)(a)(3)(ii)


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• Second, if a company’s management cannot make a reasonable determination of the likelihood of an event

or uncertainty, then disclosure is required unless management determines that a material effect on the

registrant’s financial condition or results of operation is not reasonably likely to occur.

3. Sustainability Accounting Standard Disclosures in Form 10-K

a. Management’s Discussion and Analysis

Companies should consider making disclosure on sustainability topics as a complete set in the MD&A, in a

sub-section titled “Sustainability Accounting Standards Disclosures.”3

b. Other Relevant Sections of Form 10-K

In addition to the MD&A section, companies should consider disclosing sustainability information in other

sections of Form 10-K, as relevant, including:

• Description of business—Item 101 of Regulation S-K requires a company to provide a

description of its business and its subsidiaries. Item 101(c)(1)(xii) expressly requires disclosure regarding certain costs of complying with environmental laws:

Appropriate disclosure also shall be made as to the material effects that compliance with Federal, State and local

provisions which have been enacted or adopted regulating the discharge of materials into the environment, or

otherwise relating to the protection of the environment, may have upon the capital expenditures, earnings and

competitive position of the registrant and its subsidiaries.

• Legal proceedings—Item 103 of Regulation S-K requires companies to describe briefly any

material pending or contemplated legal proceedings. Instructions to Item 103 provide specific disclosure requirements for administrative or judicial proceedings arising from laws and regulations that target discharge of materials into the environment or that are primarily for the purpose of protecting the environment.

• Risk factors—Item 503(c) of Regulation S-K requires filing companies to provide a discussion

of the most significant factors that make an investment in the registrant speculative or risky, clearly stating the risk and specifying how a particular risk affects the particular filing company.

c. Rule 12b-20

Securities Act Rule 408 and Exchange Act Rule 12b-20 require a registrant to disclose, in addition to the

information expressly required by law or regulation, “such further material information, if any, as may be

necessary to make the required statements, in light of the circumstances under which they are made, not

misleading.”

More detailed guidance on disclosure of material sustainability topics can be found in the SASB Conceptual

Framework, available for download via http://www.sasb.org/approach/conceptual-framework/.


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http://www.sasb.org/approach/conceptual-framework/

Guidance on Accounting of Material Sustainability Topics

For sustainability topics in the Non-Alcoholic Beverages industry, SASB identifies accounting metrics.

SASB recommends that each company consider using these sustainability accounting metrics when disclosing its

performance with respect to each of the sustainability topics it has identified as material.

As appropriate—and consistent with Rule 12b-2043—for each sustainability topic, companies should consider

including a narrative description of any material factors necessary to ensure completeness, accuracy, and comparability

of the data reported. Where not addressed by the specific accounting metrics, but relevant, the registrant should

discuss the following, related to the topic:

• The registrant’s strategic approach to managing performance on material sustainability issues;

• The registrant’s competitive positioning;

• The degree of control the registrant has;

• Any measures the registrant has undertaken or plans to undertake to improve performance; and

• Data for the registrant’s last three completed fiscal years (when available).

SASB recommends that registrants use SASB Standards specific to their primary industry as identified in the

Sustainable Industry Classification System (SICS™). If a registrant generates significant revenue from multiple

industries, SASB recommends that it consider the materiality of the sustainability issues that SASB has identified for

those industries and disclose the associated SASB accounting metrics.

Users of the SASB Standards

The SASB Standards are intended for companies that engage in public offerings of securities registered under the

Securities Act of 1933 (the Securities Act) and those that issue securities registered under the Securities Exchange Act

of 1934 (the Exchange Act),4 for use in SEC filings, including, without limitation, annual reports on Form 10-K (Form

20-F for foreign issuers), quarterly reports on Form 10-Q, current reports on Form 8-K, and registration statements on

Forms S-1 and S-3. Nevertheless, disclosure with respect to the SASB Standards is not required or endorsed by the

SEC or other entities governing financial reporting, such as FASB, GASB, or IASB.

3 SEC Rule 12b-20: “In addition to the information expressly required to be included in a statement or report, there shall be added such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.” 4 Registration under the Securities Exchange Act of 1934 is required (1) for securities to be listed on a national securities exchange such as the New York Stock Exchange, the NYSE Amex, and the NASDAQ Stock Market or (2) if (A) the securities are equity securities and are held by more than 2,000 persons (or 500 persons who are not accredited investors) and (B) the company has more than $10 million in assets.


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http://www.sasb.org/industryclassification/lookup-tool/

Scope of Disclosure

Unless otherwise specified, SASB recommends:

• That a registrant disclose on sustainability issues and metrics for itself and for entities in which the registrant

has a controlling interest and therefore are consolidated for financial reporting purposes (controlling interest

is generally defined as ownership of 50% or more of voting shares);5

• That for consolidated entities, disclosures be made, and accounting metrics calculated, for the whole entity,

regardless of the size of the minority interest; and

• That information from unconsolidated entities not be included in the computation of SASB accounting

metrics. A registrant should disclose, however, information about unconsolidated entities to the extent that

the registrant considers the information necessary for investors to understand its performance with respect to

sustainability issues (typically this disclosure would be limited to risks and opportunities associated with these

entities).

Reporting Format Activity Metrics and Normalization

SASB recognizes that normalizing accounting metrics is important for the analysis of SASB disclosures.

SASB recommends that a registrant disclose any basic business data that may assist in the accurate evaluation and

comparability of disclosure, to the extent that the data are not already disclosed in the Form 10-K (e.g., revenue,

EBITDA, etc.).

Such data—termed “activity metrics”—may include high-level business data such as total number of employees,

quantity of products produced or services provided, number of facilities, or number of customers. It may also include

industry-specific data such as plant capacity utilization (e.g., for specialty chemical companies), number of transactions

(e.g., for internet media and services companies), hospital bed days (e.g., for health care delivery companies), or

proven and probable reserves (e.g., for oil and gas exploration and production companies).

Activity metrics disclosed should:

• Convey contextual information that would not otherwise be apparent from SASB accounting metrics.

• Be deemed generally useful for users of SASB accounting metrics (e.g., investors) in performing their own

calculations and creating their own ratios.

• Be explained and consistently disclosed from period to period to the extent they continue to be relevant.

However, a decision to make a voluntary disclosure in one period does not obligate a continuation of that

disclosure if it is no longer relevant or if a better metric becomes available.

5See US GAAP consolidation rules (Section 810).

© 2015 SASB™

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Where relevant, SASB recommends specific activity metrics that—at a minimum—should accompany SASB accounting

metric disclosures.

ACTIVITY METRIC

CATEGORY

UNIT OF MEASURE

CODE

Volume of products sold Quantitative Millions of liters CN0201-A

Total fleet road miles traveled Quantitative Miles CN0201-B

Amount of raw materials sourced externally6 Quantitative U.S. Dollars ($) CN0201-C

Units of Measure

Unless specified, disclosures should be reported in International System of Units (SI units).

Uncertainty

SASB recognizes that there may be inherent uncertainty when disclosing certain sustainability data and information.

This may be related to variables such as the imperfectness of third-party reporting systems or the unpredictable nature

of climate events. Where uncertainty around a particular disclosure exists, SASB recommends that the registrant

should consider discussing its nature and likelihood.

Estimates

SASB recognizes that scientifically based estimates, such as those drawn from certain conversion factors or the

exclusion of de minimis values, may be necessary for certain quantitative disclosures. Where appropriate, SASB does

not discourage the use of such estimates. When using an estimate for a particular disclosure, SASB expects that the

registrant discuss its nature and substantiate its basis.

Timing

Unless otherwise specified, disclosure shall be for the registrant’s fiscal year.

Limitations

There is no guarantee that SASB Standards address all sustainability impacts or opportunities associated with a sector,

industry, or company, and therefore, a company must determine for itself the topics—sustainability-related or

otherwise—that warrant discussion in its SEC filings.

6 Note to CN0201-C—The amount of raw materials sourced externally shall be calculated on a cost of goods sold (COGS) basis. © 2015 SASB™

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Disclosure under SASB Standards is voluntary. It is not intended to replace any legal or regulatory requirements that

may be applicable to user operations. Where such laws or regulations address legal or regulatory topics, disclosure

under SASB Standards is not meant to supersede those requirements. Disclosure according to SASB Standards shall

not be construed as demonstration of compliance with any law, regulation, or other requirement.

SASB Standards are intended to be aligned with the principles of materiality enforced by the SEC. However, SASB is

not affiliated with or endorsed by the SEC or other entities governing financial reporting, such as FASB, GASB, or

IASB.

Forward-looking Statements

Disclosures on sustainability topics can involve discussion of future trends and uncertainties related to the registrant’s

operations and financial condition, including those influenced by external variables (e.g., environmental, social,

regulatory, and political). Companies making such disclosures should familiarize themselves with the safe harbor

provisions of Section 27A of the Securities Act and Section 21E of the Exchange Act, which preclude civil liability for

material misstatements or omissions in such statements if the registrant takes certain steps, including, among other

things, identifying the disclosure as “forward-looking” and accompanying such disclosure with “meaningful

cautionary statements identifying important factors that could cause actual results to differ materially from those in the

forward-looking statements.”

Assurance

In disclosing to SASB Standards, it is expected that registrants disclose with the same level of rigor, accuracy, and

responsibility as they apply to all other information contained in their SEC filings.

SASB encourages registrants to use independent assurance (attestation); for example, an Examination Engagement to

AT Section 101.

The following sections contain the disclosure guidance associated with each accounting metric, such as guidance on

definitions, scope, accounting, compilation, and presentation.

The term “shall” is used throughout this document to indicate those elements that reflect requirements of the

Standard. The terms “should” and “may” are used to indicate guidance, which, although not required, provides a

recommended means of disclosure.


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Table 1. Sustainability Disclosure Topics & Accounting Metrics

TOPIC ACCOUNTING METRIC CATEGORY UNIT OF

MEASURE CODE

Energy Management & Fleet Fuel Consumption

Operational energy consumed, percentage grid electricity, percentage renewable

Quantitative Gigajoules, Percentage (%)

CN0201-01

Fleet fuel consumed, percentage renewable Quantitative Gigajoules, Percentage (%)

CN0201-02

Water Management

Total fresh water withdrawn, percentage recycled, percentage in regions with High or Extremely High Baseline Water Stress

Quantitative Cubic meters (m3), Percentage (%)

CN0201-03

Description of strategy or plans to manage water consumption and disposal-related risks

Discussion and Analysis

n/a CN0201-04

Health & Nutrition

Revenue from (1) zero-calorie, (2) low-calorie, (3) no-added-sugar, and (4) artificially sweetened beverages7

Quantitative U.S. Dollars ($) CN0201-05

Description of the process to identify and manage products and ingredients of consumer concern


n/a CN0201-06

Product Labeling & Marketing

Number of child advertising impressions made, percent promoting products meeting the Children’s Food and Beverage Initiative (CFBAI) Uniform Nutrition Criteria

Quantitative Number, Percentage (%)

CN0201-07

Percentage of product portfolio labeled as (1) GMO and (2) non-GMO

Quantitative Percentage (%) by revenue

CN0201-08

Notices of violations received for non-conformance with regulatory labeling and/or marketing codes

Quantitative Number, Percentage (%)

CN0201-09

Amount of legal and regulatory fines and settlements associated with labeling and/or marketing practices8

Quantitative U.S. Dollars ($) CN0201-10

7 Note to CN0201-05—Disclosure shall include a description of other strategies, such as portion control, to address public health concerns. 8 Note to CN0201-10— Disclosure shall include a description of fines and settlements and corrective actions implemented in response to events.


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Table 1. Sustainability Disclosure Topics & Accounting Metrics (cont.)

TOPIC

ACCOUNTING METRIC

CATEGORY

UNIT OF MEASURE

CODE

Packaging Lifecycle Management

Total weight of packaging, percentage made from recycled or renewable materials, percentage that is recyclable or compostable

Quantitative Metric tons (t) CN0201-11

Description of strategies to reduce the environmental impact of packaging throughout its lifecycle


n/a CN0201-12

Environmental & Social Impacts of Ingredient Supply Chains

Percentage of beverage ingredients sourced from regions with High or Extremely High Baseline Water Stress

Quantitative Percentage (%) by spend

CN0201-13

Suppliers’ social and environmental responsibility audit compliance: (1) major non-conformance rate and associated corrective action rate, and (2) minor non-conformance rate and associated corrective action rate

Quantitative Rate CN0201-14

List of priority beverage ingredients and discussion of sourcing risks due to environmental and social considerations

Discussion & Analysis

n/a CN0201-15


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Energy Management & Fleet Fuel Consumption Description

As electricity consumption can indirectly contribute to climate change and air pollution through the combustion

of fossil fuels at the utility level, the cost of grid electricity is likely to increase in order to offset the cost of

tightening environmental regulations borne by utilities. With non-alcoholic beverage manufacturing plants

located in multiple regions, the likelihood and magnitude of energy price volatility will vary depending on the

exact location of facilities. Companies in the industry operate large beverage-production facilities and manage

large fleets of vehicles. As a result, they are highly reliant on energy and fuel as a primary input for value creation

in manufacturing and for use in the distribution of finished products to consumers. Beverage manufacturers may

be able to reduce their risks from volatile fossil fuel energy costs by diversifying their energy portfolio across a

range of sources and improving energy efficiency and vehicle fuel consumption.

Accounting Metrics

CN0201-01. Operational energy consumed, percentage grid electricity, percentage renewable

.01 The registrant shall disclose energy consumption from all sources, except fleet vehicles, as an aggregate

figure in gigajoules or their multiples.

• The scope includes energy purchased from sources external to the organization or produced by

the organization itself (self-generated).

• The scope includes only energy consumed by entities owned or controlled by the organization.

• The scope includes energy from all sources including direct fuel usage (except for fleet vehicles),

purchased electricity, and heating, cooling, and steam energy.

• The scope of disclosure excludes fuel consumption by fleet vehicles.

.02 In calculating energy consumption from fuels and biofuels, the registrant shall use higher heating values

(HHV), also known as gross calorific values (GCV), which are directly measured or taken from the

Intergovernmental Panel on Climate Change (IPCC), the U.S. Department of Energy (DOE), or the U.S. Energy

Information Administration (EIA).

.03 The registrant shall disclose purchased grid electricity consumption as a percentage of its energy

consumption.

.04 The registrant shall disclose renewable energy consumption as a percentage of its energy consumption.

• The scope of renewable energy includes renewable fuel the registrant consumes and renewable

energy the registrant directly produces, purchases through a renewable power purchase

agreement (PPA) that explicitly includes renewable energy certificates (RECs), or for which

Green-e Energy Certified RECs are paired with grid electricity.

• For any renewable electricity generated on-site, any RECs must be retained (i.e., not sold)


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and retired on behalf of the registrant in order for the registrant to claim them as

renewable energy.

• For renewable PPAs, the agreement must explicitly include and convey that RECs be

retained and retired on behalf of the registrant in order for the registrant to claim them as

renewable energy.

• The renewable portion of the electricity grid mix that is outside the control or influence of the

registrant is excluded from disclosure.9

.05 Renewable energy is defined as energy from sources that are capable of being replenished in a short time

through ecological cycles, such as geothermal, wind, solar, hydro, and biomass.

• For the purposes of this disclosure, the scope of renewable energy from hydro and biomass

sources is limited to the following:

Energy from hydro sources that are certified by the Low Impact Hydropower Institute.

Energy from biomass sources is limited to sources that are considered “eligible renewables”

according to the Green-e Energy National Standard Version 2.4 or that are eligible for a state

Renewable Portfolio Standard.

.06 The registrant shall apply conversion factors consistently for all data reported under this disclosure, such as

the use of HHVs for fuel usage (including biofuels) and conversion of kWh to gigajoules (including for

electricity from solar or wind energy).

CN0201-02. Fleet fuel consumed, percentage renewable

.07 The registrant shall disclose total fuel consumption by fleet vehicles as an aggregate figure in gigajoules or

their multiples.

• The scope includes fuel consumed by vehicles owned or operated by the registrant.

.08 Fuel consumption shall be based on actual fuel consumed (i.e., not based on design parameters).

.09 Acceptable methods for calculating fuel consumption include adding fuel purchases made during the year to

beginning inventory at the start of the year, less any fuel inventory at the end of the year, or tracking fuel

consumption by vehicle or through expense reports.

.10 The registrant shall disclose renewable fuel consumption as a percentage of its total fuel consumption.

• Renewable fuel is defined, consistent with U.S. EPA’s Renewable Fuel Standard (40 CFR Section

80.1401), as a fuel which meets the following requirements:

9 SASB recognizes that RECs reflect the environmental attributes of renewable energy that have been introduced to the grid, and that a premium has been paid by the purchaser of the REC to enable generation of renewable energy beyond any renewable energy already in the grid mix, absent the market for RECs.


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• Fuel that is produced from renewable biomass.

• Fuel that is used to replace or reduce the quantity of fossil fuel present in a transportation

fuel, heating oil, or jet fuel.

• Fuel that has lifecycle greenhouse gas (GHG) emissions that are at least 20 percent less

than baseline lifecycle GHG emissions, unless the fuel is exempt from this requirement

pursuant to § 80.1403.

.11 In calculating energy consumption from fuels and biofuels, the registrant shall use higher heating values

(HHV), also known as gross calorific values (GCV), which are directly measured or taken from the

Intergovernmental Panel on Climate Change (IPCC), the U.S. Department of Energy (DOE), or the U.S. Energy

Information Administration (EIA).

.12 The registrant shall apply conversion factors consistently for all data reported under this disclosure, such as

the use of HHVs for fuel usage (including biofuels).


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Water Management Description

Water management, as it relates to the quantity of water used, its use in water-scarce regions, and disposal or

treatment of wastewater in direct operations, is a growing concern for companies in the Non-Alcoholic Beverage

industry. Water is the main ingredient in the majority of the industry’s products, as industry participants utilize a

large amount of water in operations to combine carbonated and non-carbonated water with raw ingredients to

create finished beverage products. Due to their heavy reliance on access to water, non-alcoholic beverage

companies may be exposed to disruptions that could materially impact operations and add to costs. Companies

that operate globally in water-stressed regions that fail to address local water concerns may face further risks of

losing their social license to operate. Additionally, proper wastewater treatment is an important dynamic for

managing water issues in operations, since bottling plants release large quantities of effluents. Management of

water scarcity in the company’s supply chain is covered separately under the issue Environmental & Social Impacts

of Supply Chains.

Accounting Metrics

CN0201-03. Total fresh water withdrawn, percentage recycled, percentage in regions with High or

Extremely High Baseline Water Stress

.13 The registrant shall disclose the amount of water (in thousands of cubic meters) that was withdrawn from

fresh water sources for use in operations.

• Fresh water may be defined according to the local statutes and regulations where the registrant

operates. Where there is no regulatory definition, fresh water shall be considered to be water that

has a solids (TDS) concentration of less than 1000 mg/l per the Water Quality Association definition.

• Water obtained from a water utility can be assumed to meet the definition of fresh water.10

.14 The registrant shall disclose the total amount of water by volume (in thousands of cubic meters) that was

recycled during the fiscal year. This figure shall include the amount recycled in closed-loop and open-loop

systems.

• Any volume of water reused multiple times shall be counted as recycled each time it is recycled and

reused.

.15 Using the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct (publicly available online here),

the registrant shall analyze all of its operations for water risks and identify facilities that are in a location with

High (40–80%) or Extremely High (>80%) Baseline Water Stress. Water withdrawn in locations with High or

Extremely High Baseline Water Stress shall be indicated as a percentage of the total water withdrawn.

.16 For the registrant’s operations that are not sub-metered in a way that allows direct measurement of water

use, estimation is acceptable and shall be disclosed as such.

10 http://water.epa.gov/drink/contaminants/secondarystandards.cfm


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http://www.wqa.org/sitelogic.cfm?varCenterColumn=glossary.cfm&gl=1525

http://aqueduct.wri.org/atlas

http://water.epa.gov/drink/contaminants/secondarystandards.cfm

CN0201-04. Description of strategy or plans to manage water consumption and disposal-related risks

.17 The registrant shall discuss risks associated with its consumption of water and/or the disposal of wastewater

and efforts to mitigate or address these risks.

.18 The registrant shall discuss the scope of its strategies, plans, and/or reduction activities, such as whether they

pertain differently to different business units, geographies, or water sources.

.19 The registrant shall discuss the activities and investments required to achieve the plans and any risks or

limiting factors that might affect achievement of the plans and/or targets.

.20 The registrant shall discuss the use of technologies that help production and bottling plant operators reduce

water consumption, increase water recycling, and/or reduce water impact in other ways.

.21 The registrant shall discuss its short-term and long-term plans to address water consumption and disposal,

where:

• Short-term strategies may include adopting best practices in water recycling or water efficiency

initiatives.

• Long-term strategies may include process redesigns or technological innovations that reduce

withdrawal of fresh water in constrained regions, increase water-use efficiency, provide new water-

treatment or recycling systems, etc.

.22 For water-use efficiency targets, the registrant shall disclose:

• The percentage of water use within the scope of the reduction plan;

• The percentage change from the base year;

• The base year is the first year against which water-use efficiency is evaluated toward the

achievement of the target

• The timelines for the reduction activity, including the start year, the target year, and the base year.

Disclosure shall be limited to activities that were ongoing (active) or reached completion during the

fiscal year.


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Health & Nutrition Description

The Health & Nutrition issue relates to key nutritional and health concerns such as obesity, ingredient safety,

nutritional content, and acute health impacts resulting from the consumption of non-alcoholic beverages. Health

and nutritional issues are constantly evolving and shaping much of the non-alcoholic beverage industry’s

competitive landscape. Beverage manufacturers are recognizing the risk of consumers’ shifting preferences and

their increased awareness of product health consequences. Efforts to reduce obesity, in the form of new

regulations or taxes on sugar-sweetened beverages, have the ability to influence industry profitability and future

demand. Studies have suggested adverse health consequences of consuming sugar-sweetened beverages, such

as higher levels of cholesterol, increased risk for heart disease, and higher levels of obesity. These studies may

induce new perceptions of the industry’s products that lead to long-term shifts in consumer purchasing decisions.

Opportunities exist in new segments of the beverage market that address consumers’ demand for improved

nutritional value. Additionally, the safety of beverages remains an issue for the industry as consumer perceptions

of ingredients and quality shift, and adverse health effects may lead to lawsuits for beverage manufacturers.

Safety concerns related to the use of any artificial ingredients, including acute health impacts such as heart

attacks, will become increasingly material.

Accounting Metrics

CN0201-05. Revenue from (1) zero-calorie, (2) low-calorie, (3) no-added-sugar, and (4) artificially

sweetened beverages

.23 The registrant shall disclose the total revenue (in U.S. dollars) received from the sale of its (1) zero-calorie (2)

low-calorie (3) no-sugar-added (4) artificially sweetened beverage products, where:

• Zero-calorie beverages are defined as those containing less than five calories per reference amount

customarily consumed and per labeled serving, per 21 CFR Section 101.60.

• Low-calorie beverages are defined as those containing less than 40 calories per reference amount

customarily consumed and per labeled serving, per 21 CFR Section 101.60.

• Beverages with no added sugars are defined as those where no amount of sugars or any other

ingredient that contains sugars and that functionally substitutes for added sugars is added during

processing or packaging, per 21 CFR Section 101.60. For purpose of this disclosure, artificially

sweetened beverages are not to be considered beverages with no added sugars.

• Artificially sweetened beverages are those that contain chemically processed substances that are

used in place of sweeteners with sugar or sugar alcohol, consistent with the U.S. National Library of

Medicine’s definition.

.24 The registrant shall disclose revenues that are accounted for under more than one of the above beverage

categories.


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Note CN0201-05

.25 The registrant shall discuss the use of other strategies, such as portion control, to address public health

concerns associated with added sugars and calorie content of products.

.26 Disclosure shall include the products for which such a strategy has been implemented as well as a discussion

of the rationale for the applicability of the strategy.

.27 The registrant shall discuss whether strategies are related to or associated with a health and nutrition

initiative or strategy (e.g., WHO Global Strategy on Diet, Physical Activity and Health, Healthy Weight

Commitment Foundation, or the Alliance for a Healthier Generation), including regional, national,

international, or industry-specific programs.

CN0201-06. Description of the process to identify and manage products and ingredients of consumer

concern

.28 The registrant shall discuss its process to identify and manage products and ingredients of consumer

concern, including, but not limited to, artificial colors, flavors, sweeteners, preservatives, and other

ingredients or additives as described by the FDA, available here.

• The scope of disclosure shall focus on beverage ingredients, additives, and novel beverages but

should include potential synergistic effects of ingredients or products as relevant.

.29 Relevant efforts to discuss include, but are not limited to, risk assessments, participation in long-term health

studies, completion of toxicological screens, procedures for receiving and reviewing consumer concerns,

labeling of novel beverages, and phasing out, substituting, or using alternative materials for ingredients of

concern.

.30 The registrant shall discuss any significant complaints, such as those resulting in lawsuits, relating to products

of consumer concern and any efforts to mitigate the related future risks.

.31 The registrant may choose to discuss implementation of relevant beverage ingredient and additive standards,

such as those under the CODEX Alimentarius International Food Standards of the Food and Agriculture

Organization (FAO) and the World Health Organization (WHO), available here.


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http://www.fda.gov/Food/IngredientsPackagingLabeling/FoodAdditivesIngredients/ucm094211.htm

http://www.codexalimentarius.net/gsfaonline/docs/CXS_192e.pdf

Product Labeling & Marketing Description

Companies in the Non-Alcoholic Beverage industry routinely make claims related to health benefits of consuming

products, which may be misleading and untruthful. This results in litigation that can be materially harmful to

operations and company reputations. In the U.S., the Federal Trade Commission (FTC) and the FDA oversee the

truthfulness of advertising in the Non-Alcoholic Beverage industry, which includes holding advertisers

accountable. Additionally, new laws and regulations surrounding the use and labeling of genetically modified

organisms (GMO) may play an increasing role in customer purchasing decisions, as many of the ingredients in

non-alcoholic beverages are genetically modified. Companies in the industry are also subject to criticism and

regulation surrounding marketing to children, especially in the U.S., where childhood obesity is rapidly increasing.

New initiatives have been launched by industry participants to voluntarily monitor and control advertising toward

children, which is changing industry marketing dynamics.

Accounting Metrics

CN0201-07. Number of child advertising impressions made, percent promoting products meeting the

Children’s Food and Beverage Initiative (CFBAI) Uniform Nutrition Criteria

.32 The registrant shall disclose the total number of advertising impressions made on children, where:

• An advertising impression is a measure of the number of times an advertisement is seen, heard,

watched, or read.

• Children are defined as age 12 and under, consistent with the CFBAI.

.33 The scope includes advertising impressions made through media such as television, radio, print, Internet,

interactive games (including advergames), tablets, smartphones, video games, computer games, DVDs, and

word of mouth, consistent with the CFBAI.

.34 The registrant shall disclose the estimation methods used to calculate the number of advertising impressions

made on children, including its method for collecting such data. Where reasonable estimation methods

include, but are not limited to:

• Gross rating points and target ratios to determine impressions in television, radio, and print

advertising.

• Average visits per month, average page visits per month, and targeted index by age for company-

owned websites.

• Total number of ads viewed and child audience share on third-party websites, advergames, tablets,

smartphones, video games, and computer games.

.35 The registrant shall disclose the percentage of advertising impressions made on children that promote

products which meet the CFBAI’s Uniform Nutritional Criteria.


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http://www.bbb.org/us/storage/16/documents/cfbai/CFBAI-Category-Specific-Uniform-Nutrition-Criteria.pdf

.36 The percentage is calculated as the total number of child advertising impressions promoting products that

meet the CFBAI Uniform Nutritional Criteria divided by the total number of child advertising impressions

made.

CN0201-08. Percentage of product portfolio labeled as (1) GMO and (2) non-GMO

.37 The registrant shall disclose the percentage (by revenue) of its product portfolio that is labeled as (1)

containing Genetically Modified Organism (GMO) and (2) free of GMOs, where:

• GMOs are defined as organisms, with the exception of human beings, in which the genetic material

has been altered in a way that does not occur naturally by mating and/or natural recombination,

consistent with E.U. Directive 2001/18/EC.

.38 The scope of disclosure includes GMOs that are defined by, or subject to, the following:

• E.U. Directive 2001/18/EC;

• Regulation EC 1829/2003;

• Maine HP 0490 LD 718;

• Vermont H. 112 Act 0120;

• Connecticut House Bill 6527; or

• Other U.S. state or federal regulation, as enacted.

.39 The registrant shall calculate the percentage of its product portfolio that is labeled: (1) GMO as the total

revenue received from products that are labeled as containing GMOs divided by the total revenue received

from products in this portfolio; and (2) non-GMO as the total revenue received from products that are

labeled as free of GMOs divided by the total revenue received from products in this portfolio. CN0201-09. Notices of violations received for non-conformance with regulatory labeling and/or

marketing codes

.40 The registrant shall disclose the number of notices received that substantiate a violation of labeling- and/or

marketing-related regulatory code(s), statute(s), or other requirement(s).

• A labeling- and/or marketing-related non-conformance, consistent with the United States Fair

Packaging and Labeling Act (Title 15, Chapter 39) and the FTC Act (Title 15 Chapter 2), includes

products with labels that are misbranded or use deceptive acts of advertising.

• Incidences include, but are not limited, to the FDA’s Untitled Letters, Warning Letters, or foreign

equivalents and the FTC’s cease-and-desist orders, civil penalties, corrective advertising remedies, or

foreign equivalents.

• A database of Warning Letters is available here, and Untitled Letters are available here.


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http://www.bbb.org/us/storage/16/documents/cfbai/CFBAI-Category-Specific-Uniform-Nutrition-Criteria.pdf

http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/UCM2005393.htm

http://www.fda.gov/food/complianceenforcement/untitledletters/default.htm

.41 The scope of disclosure includes non-conformances that are subject to regulations including, but not limited

to, the following:

• The Federal Food and Drugs Act of 1906 (Title 21, Chapter 1)

• The Federal Food Drug and Cosmetic Act (Title 21, Chapter 9)

• The Fair Packaging and Labeling Act (Title 15, Chapter 39)

• The Federal Trade Commission Act (Title 15, Chapter 2)

• Other U.S. state or federal and foreign regulations, as enacted

.42 The registrant may disclose any other non-conformances with third-party, industry, or internal codes on

labeling and/or marketing.

CN0201-10. Amount of legal and regulatory fines and settlements associated with labeling and/or

marketing practices

.43 The registrant shall disclose the amount (excluding legal fees) of all fines or settlements associated with

labeling and/or marketing practices, such as those related to enforcement of U.S. laws and regulations on

nutrient content claims, health claims, other unfair or deceptive claims, and/or misbranded labeling,

including violations of the Federal Food and Drugs Act of 1906 and the Nutrition Labeling and Education Act

of 1990, among others.

.44 Disclosure shall include civil actions (e.g., civil judgment, settlements, or regulatory penalties) and criminal

actions (e.g., criminal judgment, penalties, or restitutions) taken by any entity (government, businesses, or

individuals).

Note to CN0201-10

.45 The registrant shall briefly describe the nature (e.g., guilty plea, deferred agreement, or non-prosecution

agreement) and context (e.g., nutrient content claims, health claims, misbranded labeling, etc.) of fines and

settlements.

.46 The registrant shall describe any corrective actions it has implemented as a result of each incident. This may

include, but is not limited to, specific changes in practices, management, codes, products, or training.


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Packaging Lifecycle Management Description

Packaging lifecycle impacts presents major risks and opportunities for non-alcoholic beverage companies, from

materials design to transportation and disposal stages of beverage containers and packaging. Each packaging

lifecycle stage presents its own unique environmental challenges and opportunities that beverage manufactures

should consider when purchasing or researching new materials. Containers and packaging account for a

significant amount of waste in the U.S. every year. While the majority of non-alcoholic beverage manufacturers

do not manufacture their own bottles and packaging, they face the responsibilities and reputational risks

associated with the negative externalities that their products’ containers create. They are also directly affected by

any legislation around end-of-life management of beverage containers, particularly with extended producer

responsibility laws. Beverage companies can work with packaging manufacturers to improve the environmental

characteristics of their products, which can result in better brand reputations and cost savings for beverage

producers.

Accounting Metrics

CN0201-11. Total weight of packaging, percentage made from recycled or renewable materials,

percentage that is recyclable or compostable

.47 The registrant shall disclose the total weight of packaging purchased by the registrant, in metric tons, where:

• Packaging includes any material containing the registrant’s product or otherwise accompanying

the product, as well as secondary materials used by the registrant for shipping and distribution of

products.

.48 The registrant shall disclose the percentage of packaging (by weight) made from recycled or renewable

materials, where:

• Recycled materials are defined as materials that have been recovered or otherwise diverted from

the waste stream. Recycled materials include recycled raw materials as well as used,

reconditioned, and remanufactured components, consistent with the FTC Green Guides. Recycled

content can be either pre-consumer or post-consumer waste.

• Renewable materials are defined as those that either increase in quantity or otherwise renew over

a short (i.e., economically relevant) period of time, such that if the rate of extraction takes account

of limitations in the reproductive capacity of the resource, renewables can provide yields over an

infinite time horizon.

.49 The percentage is calculated as the total weight of packaging made from recycled or renewable materials

divided by the total weight of all packaging used by the registrant.

.50 For packaging materials that contain both recycled and virgin parts, or which are made from both renewable

and nonrenewable resources, the registrant shall classify a portion of the material as recycled or renewable


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based on an estimate of the weight of each portion. Alternatively, the registrant may exclude that item from

consideration as recycled or renewable, but should include it in the total weight of packaging materials.

.51 The registrant shall disclose the percentage of packaging (by weight) that is recyclable or compostable,

where:

• “Recyclable” is defined as able to be reprocessed for the material’s original purpose or for other

purposes. A product or package is recyclable if it can be collected, separated, or otherwise

recovered from the waste stream through an established recycling program for reuse or use in

manufacturing or assembling another item, consistent with the FTC Green Guides.

• “Reusable” is defined as a durable packaging product that is able to be used multiple times for

the original purpose for which it was conceived.

• For the purposes of this disclosure, reusable shall be considered recyclable.

• “Compostable” is defined as the ability of a material to undergo degradation by biological

processes to yield CO2, water, inorganic compounds, and biomass at a rate consistent with other

known compostable materials and that leaves no visible, distinguishable, or toxic residue.

Compostable plastics are further defined by ASTM Standard D6400, 2004—Standard

Specification for Compostable Plastics.

.52 The percentage is calculated as the total weight of recyclable or compostable packaging divided by the total

weight of all packaging.

CN0201-12. Description of strategies to reduce the environmental impact of packaging throughout its

lifecycle

.53 The registrant shall discuss its strategies to reduce the environmental impact of packaging throughout its

lifecycle, such as reducing packaging weight and volume for a given application or using alternative

materials, including those that are recycled, recyclable, compostable, or degradable.

.54 Relevant disclosure may include, but is not limited to, the following:

• Implementation of the “Essential Requirements” in Article 9, Annex II of the E.U. Directive on

Packaging and Packaging Waste (94/62/EC), which includes minimization of packaging weight and

volume to the amount needed for safety, hygiene and consumer acceptance of the packed product;

minimization of noxious or hazardous constituents; and suitability for reuse, material recycling,

energy recovery, or composting.

• Performance on the Sustainable Packaging Coalition’s Material Use metrics, such as Material Use to

Packaged Product Yield or Materials Health metrics, such as Toxicants Concentration and/or

Toxicants Migration.

• Performance on the Global Protocol on Packaging Sustainability 2.0 metrics for Packaging Weight

and Optimization and/or Assessment and Minimization of Substances Hazardous to the

Environment.


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.55 The registrant may choose to discuss Lifecycle Assessments (LCA) analysis of its packaging in the context of

its management approach to maximizing product efficiency, including weight reduction, transportation

efficiency, and reduced toxicity. The efficiency and health of product packaging should be discussed in terms

of LCA functional unit service parameters (i.e., time, extent, and quality of function).

Notes

Definitions

Additional References

EPA Waste Hierarchy

Summary of the EPA Municipal Solid Waste Program


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http://www.epa.gov/waste/nonhaz/municipal/hierarchy.htm

http://www.epa.gov/reg3wcmd/solidwastesummary.htm%23waste

Environmental & Social Impacts of Ingredient Supply Chains Description

The ecological and social impacts that occur within supply chains is an increasingly important issue for non-

alcoholic beverage companies, as concerns over climate change, water scarcity in the agriculture supply chain,

and environmentally and socially responsible sourcing are shaping the industry’s competitive landscape.

Companies in the Non-Alcoholic Beverage industry use many ingredients that are highly susceptible to price

volatility, largely due to shifting weather patterns, droughts, and crop disease. These ingredients include coffee

beans, corn, sugarcane, oranges, and other fruits. Crop exposure to external forces can lead to high degrees of

cost inflation for beverage ingredients, which can undermine company profitability. Additionally, supply chain

disruptions resulting from environmental and social considerations, such as supply shortages or labor violations,

present further risk to a company’s long-term ability to source key materials and ingredients. Companies that

recognize these risks and engage with key suppliers will build more resilient supply chains.

Accounting Metrics

CN0201-13. Percentage of beverage ingredients sourced from regions with High or Extremely High

Baseline Water Stress

.56 The registrant shall disclose the percentage, on a cost of goods sold (COGS) basis, of beverage ingredients

sourced from regions with High or Extremely High Baseline Water Stress.

.57 The scope of beverage ingredients shall include those items grown by a tier-1 supplier or third party that are

sourced for eventual sale.

.58 The percentage is calculated as the total cost of goods sold, in U.S. dollars, of beverage ingredients sourced

from regions with High or Extremely High Baseline Water Stress divided by the total cost of beverage

ingredients sourced.

.59 Using the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct (publicly available online here),

the registrant shall analyze all of its known sources for water risks and identify sources that are in a location

with High (40–80%) or Extremely High (>80%) Baseline Water Stress.

.60 For the registrant’s sources that cannot be directly measured, estimation is acceptable and shall be disclosed

as such.

CN0201-14. Suppliers’ social and environmental responsibility audit compliance: (1) major non-

conformance rate and associated corrective action rate, and (2) minor non-conformance rate and

associated corrective action rate

.61 The registrant shall disclose its suppliers’ compliance with external social and environmental audit standards

or internally developed supplier code(s) of conduct, based on the number of non-conformances identified.


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http://aqueduct.wri.org/atlas

• The registrant may limit its disclosure to those suppliers that, in aggregate, account for greater than,

or equal to, 80 percent of its supplier sourcing that is directly related to manufacturing.

.62 The registrant shall calculate and disclose the major non-conformance rate as the total number of priority

non-conformances identified in the supply chain divided by the number of facilities audited.

• Major non-conformances are the highest severity of nonconformance and require escalation by

auditors. Priority non-conformances confirm the presence of underage child workers (below the

legal age for work or apprenticeship), forced labor, health and safety issues that can cause

immediate danger to life or serious injury, and environmental practices that can cause serious and

immediate harm to the community. Major non-conformance includes material breach or systemic

breaking of code requirement or law. Issues representing an immediate danger must be corrected

as soon as practical, but not longer than 90 days after discovery.

• In equivalent codes of conduct, major non-conformances may also be referred to as “zero

tolerance” issues, “critical non-conformance,” or “core violations.”

.63 The registrant shall calculate and disclose the minor non-conformance rate as the total number of minor

non-conformances identified in the supply chain divided by the number of facilities audited.

• A minor non-conformance by itself doesn’t indicate a systemic problem with the management

system. It is typically an isolated or random incident and represents a low risk to workers and the

environment.

.64 The registrant shall calculate and disclose its corrective action rate for major non-conformances as the

number of corrective action plans completed within 60 days to address major non-conformances divided by

the total number of priority non-conformances that have been identified.

.65 The registrant shall calculate and disclose its corrective action rate for minor non-conformances as the

number of corrective action plans completed within 90 days to address minor non-conformances divided by

the total number of minor non-conformances that have been identified.

.66 A corrective action is defined as the implementation of practices or systems to eliminate any non-

conformance and ensure there will be no reoccurrence of the non-conformance, and verification that the

corrective action has taken place.

.67 The registrant shall disclose the standards to which it has measured social and environmental responsibility

audit compliance.

• For internally developed supplier code(s) of conduct, the registrant shall disclose the public location

where such code(s) can be viewed.

CN0201-15. List of priority beverage ingredients and discussion of sourcing risks due to environmental

and social considerations

.68 The registrant shall identify any beverage ingredients that are a priority to the registrants business.


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• Priority beverage ingredients are defined as those which are essential to the registrant’s principal

products, where principal products are those which accounted for 10 percent or more of

consolidated revenue in any of the last three fiscal years, consistent with 17 CFR 229.101.

.69 The registrant shall discuss its strategic approach to managing its environmental and social risks that arise

from its priority beverage ingredients, where:

• The scope of disclosure should focus on beverage ingredients that are sourced from directly

contracted growers or through producer supply agreements, or that are procured through other

means.

.70 The registrant should identify which beverage ingredients present risks to its operations, the risks that are

represented, and the strategies the registrant uses to mitigate such risks.

.71 For environmental risks, relevant strategies to discuss include the diversification of suppliers, supplier training

programs on environmental best management practices, expenditures on R&D for alternative and substitute

crops, and audits or certifications of suppliers’ environmental practices.

.72 For social risks, relevant strategies to discuss include supplier training programs on agrochemical application,

engagement with suppliers on labor and human rights issues, and maintenance of a supply chain code of

conduct.


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